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Till College Debt do We Part

“Marriage can change everything for couples– in some cases even their student-loan payments” writes Cheryl Munk for The Wall Street Journal. 

The media has educated us about the high costs of attending college and the massive student debt load facing many millenials and their parents. Often house buying, procreation and investing for retirement are delayed as couples struggle to pay off student loans while earning less than stellar incomes in a high cost housing market.

Munk writes that “marriage also can trigger changes to one or both partners’ actual student-loan payments and loan-related tax breaks.”Specifically:

Marriage might make one ineligible for income-based repayment plans, depending on the couple’s income or might raise the required payment.
Use this tool to determine the impact of marriage: https://studentloans.gov/myDirectLoan/repaymentestimator.action
Think twice or three times and consult a tax professional if you are contemplating filing taxes separately when married. The implications and consequences are numerous.

Student debt taken on after marriage presents potential complications.
In community property states if one spouse defaults, creditors may pursue the other spouse for repayment.
In the event of divorce, complications arise if one spouse co-signed for the debts of the other spouse. The co-signing spouse is legally responsible to repay if the former spouse defaults.

Defaulting on a federal loan can result in wage garnishment, withholding of federal income tax refunds, and destroy the defaulting spouse’s credit score. A default by one spouse can ruin a couple’s chance of getting approved for a home mortgage.

Of course, no one expects any of the above to happen to them…
Source: Financial Planning for Women